Valves supplier Neles opposed to merger with Valmet

Valmet has made a proposal for the
takeover of valves producer Neles
13 Oct 2020 − 

Both Valmet and Alfa Laval are interested in acquiring Finnish valves producer Neles. For now, Neles has recommended to its shareholders to accept Alfa Laval's offer.

Finnish valves expert Neles has announced a negative response to Valmet's proposal to merge the two companies. Neles said it had carefully assessed the proposal to start discussions on a potential merger. However, some points had to be clarified and it had not received the requisite information.

As Valmet's approach did not enable a meaningful comparison with the takeover offer made by Alfa Laval, the recommendation to shareholders to accept this offer remained in place, Neles said. Alfa Laval's tender offer is expected to expire on 22 October.

In July, Alfa Laval had made the offer to take over Neles for a price of €11.50 per share, valuing Neles' total equity at €1.73m. In August, Neles' Board of Directors recommended that the shareholders accept the tender offer. The offer was then followed by Valmet's merger proposal on 29 September.

Valmet's stake in Neles rises to 29.5 per cent

In July 2020, Valmet acquired a share of 14.88 per cent in Neles and has since continuously increased its stake to 29.5 per cent. The Finnish technology firm said it did not support the recommendation of Neles and blamed the company of depriving its shareholders of the possibility to evaluate an alternative to Alfa Laval's offer.

But Valmet does not give up and said it sustained its goal to merge with Neles. The company is convinced that this would create long-term value to the shareholders and form a strong paltform for further business growth especially in automation systems and valves. A combination would create a Nordic based global leader with 16,000 employees and more than €4bn in net sales, Valmet said.

Neles was created in the partial demerger of Metso Corporation on 1 July 2020 and is a provider of flow control solutions and services, producing valves for different industries such as the mining, chemicals or pulp and paper industries. Valmet says that 26 per cent of Neles's net sales come from the pulp and paper industry. In 2019, Neles booked sales of €660m. The company employs 2,900 people in 40 countries and is listed on the Helsinki stock exchange.

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